1) From an eurocrat pov, why build a browser when you can regulate the existing ones instead? EU core competence is regulating, not building, and they know it.
2) You don't actually need to build a browser to achieve this goal, you just need a root program, and a viable (to some extent) substitute already exists. cf. all "Qualified" stuff in EU lingo. So again why do the work and risk spectacular failure if you don't need to.
3) Building alternative browser for EU commerce that you'd have to use for single market, but likely wouldn't work for webpages from other countries would be a bad user experience. I know what I'm sayig, I use Qubes and I've got different VMs with separate browser instances for banking etc. I'm pretty sure most people wouldn't like to have a similar set up even with working clipboard.
There are things you can't achieve by regulation, e.g. Galileo the GPS replacement, which you can't regulate into existence. Or national clouds: GDPR, DSA, et al. won't magically spawn a fully loaded colo. Those surely need to be built, but another Chromium derivative would serve no purpose.
If you're talking about technical capability, yeah, no contest here.
But if EC can legislate e-signatures into existence, then it follows that they can also legislate browsers into accepting Q certs, can they not?
Mind you, they did exactly that with document signing. They made a piece of paper say three things: 1) e-signatures made by private keys matching Qualified™ Certificates are legally equivalent to written signatures, 2) all authorities are required to accept e-signatures, 3) here's how to get qualified certificates.
Upon reading this enchated scroll, 3) magically spawned and went to live its own way. ID cards issued here to every citizen are smartcards preloaded with private keys for which you can download an X.509 cert good for everydoy use. The hard part was 2), because we needed to equip and retrain every single civil servant, big number of them were older people not happy to change the way they work. But it happened.
So if the hard part is building and the easy part is regulating, and they have prior art already exercised, then why bother competing with Google, on a loss leader, with taxpayer funds. And with non-technical feature, but a regulatory one, which would most likely case the technical aspects like performance and plugin availability to be neglected.
